What internal controls should be maintained by a growing business?
|Well, internal controls means actually how a company manages its finances and makes sure that the money coming in and the money going out is properly accounted for and controlled in the sense that you don't want disbursements going out parties to that shouldn't receive them. You want to make sure that your receivables are collected in a timely manner. I think that is as far is the overall control. I think that the main overall control for a small business is what we call separation of duties. And by this I mean, let's say you have a small office where theres maybe an owner, maybe one or two clerical employees. A lot of times companies will have one person do all the accounting. They'll take in the cash, they'll make the bank deposit, they'll write the checks, they'll reconcile the bank account. When you have too many of theses duties in one person's hands there's a lot of areas that defalcation could happen and because of that you want to make sure that even in a small office like I described maybe one person handles the receivables side and one person handle the payable side. I would always suggest the owner get the bank statement sent directly to their home different from the office so they can open up the statement and look at the checks to see if maybe names have been changed or amounts have been changed. If those separation of duties are maintained in a small office they go a long way to making sure internal controls are sufficient for level of business.|